Even though global markets are trading with increased worries over the trade war escalating and dragging on, US President Donald Trump doesn’t expect the trade war to prolong for an extended period of time. Of course, this is just how he feels and no one else has seconded this just yet.
On the one hand, he announced more tariffs on Chinese imports last week, causing a resurgence in trade tensions between the two nations. Then, when China retaliated by weakening the yuan, the US Treasury Department labeled China as a currency manipulator.
Meanwhile, Fed officials and leading investment banks expect the trade dispute to extend for at least another year. According to St. Louis Fed President James Bullard, the uncertainty surrounding trade could continue into the coming quarters and even years.
China, on its part, has warned that the US’s move to accuse China of manipulating its currency could have long lasting and dire consequences on global financial markets. This comes after it announced its intention to stop all agricultural products’ imports from the US on Tuesday.